Preference for in-house agencies has surged to 58%. So are we seeing the demise of external ad agencies?
Economic factors are behind the rapid rise of in-house ad agencies. Outsourcing has become too expensive for Companies to manage. And as budget cuts are in place, doing advertising in-house has developed into a practical option.
The contribution of new technology also fueled the preference for in-house ad agencies. While outsourcing lorded it over in the past, new technology made the process so simple, coupled with the entry of high-end printers inspired companies to do it in-house. Besides with everything in-house, companies can deal with (1) creative strategy secretly, (2) maintain the level of competitiveness, (3) institute cost cutting/cost efficiency measures when necessary, (4) put to full use the company’s institutional knowledge, and of course (5) quicker turn around can be expected.
- Creative strategy is the most important aspect in all advertising campaigns. The final ad output must create ripples in the industry injecting the kind of sensibilities to the general consumers. Failure of the campaign to manifest consumer response only means that it failed. In-house agencies offer the best scenario for creative strategy to flourish. First, because personnel see eye to eye keeping lines of communication open to ideas. Second, ideas developed are kept within the confines of the office, secrets are kept secret. Companies can never expect this kind of environment when ads are outsourced.
- Maintaining the level of competitiveness is sorely diminished in in-house agencies. Ad executives can not always provide fresh ideas unless he interacts with other professionals in the field. However, this minor flaw is a thing of the past because of the Internet. The Internet has given ad executives a tremendous boost as it can help generate ideas to resolve a nagging creative concern.
- Cost cutting/cost efficiency directive can always be implemented in all the ads phases of development. This is the area where in-house beats outsourcing soundly. The difference in ad production cost is so great that companies find in-house agencies so tempting. Out of this desire to save and maximize company resources has regretfully placed the continued existence of external ad agencies in jeopardy.
- Institutional knowledge puts in-house agencies to advantage. Lengthy discussions are avoided because the company knows what it wants, how the ad must materialize, and how it will appeal to consumers.
- Quicker turn-around can be expected when companies deal with in-house agencies. The pace of development can easily be dictated to fit the eccentricities of the ad campaign. Companies can never rush things out when dealing with external ad agencies. Waiting in line dictates the pace of the ad campaign.
Finally, advertising campaigns always end up with an equally mesmerizing printed material. And because printing also eats up a sizable share of the finances, companies resort to in-house printing. Just like in-house ad agencies, in-house printing offers companies an option to efficiently manage their budgets.